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An investor is considering buying 1,000 shares. She expects to receive a dividend of 16pence per share in 1 years time and 20 pence after
An investor is considering buying 1,000 shares. She expects to receive a dividend of 16pence per share in 1 years time and 20 pence after 2 years. She will sell the shares immediately after receiving the second dividend, at which time she expects to be paid1.60 per share. She requires a return of 15% per annum on her investment. How much should she be willing to pay for the shares today?
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